Upwork reported Q2 2026 revenue of $191.7 million, beating analyst estimates by 0.9% but marking a 1.7% year-on-year decline. The company's non-GAAP earnings per share of $0.41 exceeded expectations by 19.7%. Despite the revenue beat, Upwork's stock dropped 20.4% following disappointing forward guidance. The company projects Q3 revenue of $180 million, 7.1% below analyst estimates, and lowered its full-year revenue guidance to $740 million from $775 million. Active clients declined to 763,000, down 33,000 year on year. Operating margin decreased to 14.7% from 16.7% in the prior-year quarter, whilst free cash flow margin improved to 18.8% from 6.6% in the previous quarter. Analysts expect Upwork's revenue to remain flat over the next 12 months.

Upwork Q2 earnings call highlights. August 10, 2026 Key points. * Upwork exceeded Q2 expectations with $191.7 million in revenue and $64.1 million in adjusted EBITDA, supported by cost controls, higher-value clients and record GSV per active client of $5,230. * AI is creating both opportunity and pressure: AI-related job GSV rose 22% year over year and AI strategy and consulting grew 51%, while automation reduced demand for lower-complexity work and contributed to weaker active-client trends. * Upwork lowered its 2026 outlook to $730 million-$750 million in revenue and $225 million-$235 million in adjusted EBITDA, citing worsening Google search referrals, ongoing labor-market weakness and faster AI automation; it plans to increase paid acquisition spending by $5 million-$10 million in the second half. * Five stocks to consider instead of Upwork. Upwork NASDAQ: UPWK reported second-quarter 2026 revenue of $191.7 million, at the high end of its guidance range, while adjusted EBITDA of $64.1 million exceeded the company's outlook. Management said disciplined cost management supported profitability as the company navigated accelerating AI-related automation, weaker Google search referrals and a subdued labor market. Chief Executive Officer Hayden Brown said the company is prioritizing customer value and higher-value work rather than client volume. Gross services volume, or GSV, totaled $966 million in the quarter, reflecting what Brown described as the ongoing reduction of lower-value and highly automatable work, along with changes in new-client acquisition. Higher-value clients and monetization support results. Upwork said GSV per active client reached a record $5,230, rising 5% from a year earlier and marking the eighth consecutive quarter of sequential growth in the metric. The company's active client count was 763,000, a figure management said remains under pressure from AI automation, search trends, labor-market conditions and its own focus on customer value over volume. Business Plus, the company's offering for larger small and midsize business customers, continued to exceed internal plans. GSV through Business Plus increased 174% year over year, according to Brown. The company also said GSV per new client grew year over year, while its average spend per contract reached an all-time high over a trailing 12-month period. Revenue from advertising and monetization tools - including dynamic pricing, Connects and Business Plus - rose 15% year over year. Connects and talent subscriptions represented 15% of total revenue. Upwork reported a 19.8% take rate for the quarter and said the higher-margin revenue streams also improve matching quality. Non-GAAP gross margin was 77%, near record levels, and adjusted EBITDA margin was 33.4%. Free cash flow totaled $35.9 million, including the impact of one-time restructuring-related cash payments. Upwork said its restructuring program, announced in May, is expected to produce about $40 million in realized savings during fiscal 2026 from an annualized $70 million reduction in operating expenses. AI work expands even as automation pressures demand. Brown said AI-related automation accelerated during the quarter, particularly in lower-complexity work that Upwork had previously identified as more exposed to automation. At the same time, the company reported 22% year-over-year growth in GSV from jobs explicitly requesting AI-related work, reaching an approximate annualized run rate of $330 million. Discover more Stock Market Holidays Market Cap Calculator Management said that figure likely understates the amount of AI-related activity on the platform because many clients now expect AI capabilities without specifically mentioning AI in their job posts. In a recent talent survey cited by Brown, nearly half of respondents said their most recent jobs involved AI, while only 16% of those job posts explicitly referenced AI. Upwork's AI strategy and consulting category grew 51% year over year in the second quarter. Brown said small and midsize businesses are increasingly hiring AI experts to help apply AI tools to specific industries, workflows and business problems. The company also announced its Upwork MCP Server, which is intended to support agentic interactions across the marketplace. Upwork said it embedded its services into ChatGPT and Claude during the second quarter, and the MCP Server makes Upwork talent and jobs available within AI tools that connect to its MCP. Brown said the product is designed to let clients and their AI agents hire and collaborate with freelancers without leaving their preferred AI environments. Search changes prompt acquisition shift. Management said Google's changes to search referrals and search-page layout reduced the number of searches resulting in referrals to businesses, dampening Upwork's new-client acquisition. Brown said the deterioration was especially pronounced in non-brand search during the second quarter and has not yet stabilized. Upwork's updated outlook assumes that search-related impacts will worsen through the third and fourth quarters. The company is responding by increasing paid acquisition investments by approximately $5 million to $10 million in the second half of the year. Paid search became Upwork's largest customer-acquisition channel, and cost per new contract start improved 22% sequentially in the second quarter. Brown said the company has also found promising results in international search marketing, Meta, Reddit, podcasts and connected television. Meanwhile, Upwork is developing answer-engine optimization and LLM-based referral channels, which it described as still nascent. Enterprise progress and revised outlook. In Enterprise, Upwork began migrating customers to its new platform in June and said customer feedback has been positive. GSV per Enterprise account rose 7% year over year, the highest level in more than three years, while GSV from employer-of-record solutions increased 29% year over year. Brown said Upwork remains on track for approximately 25% Enterprise GSV growth for full-year 2026. The company attributed part of the opportunity to its acquisition of Ascen, which supports employer-of-record services through wholly owned entities in the United States and Canada. Management said the expanded capabilities have improved its value proposition, sales funnel and margins, and cited a recently won multimillion-dollar staff-augmentation contract with a large global company. Upwork closed a new $150 million revolving credit facility with a $50 million accordion feature during the quarter. The company said the facility positions it to repay convertible notes due in August 2026, while supporting potential acquisitions and share repurchases. It repurchased about 164,000 shares in the second quarter and approximately 8.3 million shares year to date. For full-year 2026, Upwork lowered its outlook to revenue of $730 million to $750 million and adjusted EBITDA of approximately $225 million to $235 million. The guidance assumes a heightened pace of AI-related automation and no improvement in labor-market conditions. The company forecast full-year non-GAAP diluted earnings per share of $1.38 to $1.43. For the third quarter, Upwork expects revenue of $176 million to $184 million, adjusted EBITDA of $50 million to $54 million, and non-GAAP diluted EPS of $0.31 to $0.33. About Upwork (NASDAQ:UPWK). Upwork Inc operates a leading online talent marketplace that connects businesses with independent professionals worldwide. Through its digital platform, the company enables clients across industries - including technology, marketing, creative services and customer support - to source, hire and manage freelance talent on demand. Key features of the Upwork platform include streamlined job posting, proposal evaluation, time-tracking tools, invoicing and secure payment processing, all designed to simplify collaboration between clients and remote workers. The company traces its roots to the merger of two pioneering freelance marketplaces, Elance (founded in 1998) and oDesk (founded in 2003), which combined in 2015 to form a unified entity. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Continue following MarketBeat Before you consider Upwork, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Upwork wasn't on the list. While Upwork currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys. Robotics and automation are rapidly becoming essential infrastructure across healthcare, manufacturing, logistics, and many other industries. "Physical AI" is coming to the United States, and there are four ways that investors can gain exposure to this new robotics revolution. Plus, learn which seven companies are most positioned to benefit as intelligent robots enter the workforce.

Upwork and Wix.com present contrasting profiles for investors evaluating tech platforms in 2026. Both companies are adapting their services to incorporate artificial intelligence whilst serving different market segments. Upwork operates a marketplace connecting businesses with freelance professionals across 90 countries. In fiscal year 2025, revenue reached $787.8 million, up 2.4% year-over-year, with net income of $115.4 million and a 14.7% net margin. The company generated $242.5 million in free cash flow and maintains a debt-to-equity ratio of 0.6x. Wix provides AI-powered website building and hosting services. FY 2025 revenue totalled $2.0 billion, growing 13.2% year-over-year, with net income of $50.6 million and a 2.5% net margin. Free cash flow was $574.3 million, though the company shows a negative debt-to-equity ratio of -4.3x due to substantial share buybacks. Stock-based compensation represented 26.3% of Upwork's operating cash flow versus 40.7% for Wix.